Outcome: Successfully withdrawn in exchange for a commitment to publish diversity and inclusion initiatives including workforce diversity data.
The business case for workforce diversity is compelling. A growing body of empirical research indicates a significant positive relationship between firm value and the percentage of women and people of color in senior leadership roles. McKinsey & Company, for example, found companies in the top quartile for gender or racial ethnicity are more likely to financially outperform national industry medians. Specifically, companies with greater ethnic diversity were 35 percent more likely to outperform. For every 10 percent increase in racial and ethnic diversity on the senior-executive team, earnings before interest and taxes rise 0.8 percent. In a study released in September by the Stanford Graduate School of Business, a group of researchers found that share prices jumped when companies reported better-than-expected gender diversity; they fell when firms announced demographics that underwhelmed.
Hanesbrands does not disclose workforce data, or disclose results of diversity initiatives. Approximately 85% of Hanebrands’ executive team is white and male. As a result, shareholders have insufficient information to determine if Hanesbrands has a diverse workforce or has been successful in expanding diversity into senior roles. Without detailed workforce diversity information investors cannot accurately evaluate Hanesbrands’ commitment to diversity and progress over time.
Leading consumer companies such as VF Corporation, Nike and Adidas provide details of diversity programs and policies, and disclose workforce statistics consistent with data provided to the Equal Employment Opportunity Commission (EEOC).
Expanding workforce diversity requires policies and programs that attract and retain diversity in the workplace. A company’s family leave policies, for example, can play a role. McKinsey & Company reports that paid parental leave and the availability of on-site child care can significantly impact women’s ability to rise to higher productivity roles and therefore perpetuate a gender wage gap.
Diversity benchmarks can help ensure companies hiring create competitive workforces. Further, we believe that linking diversity performance metrics to senior executive compensation packages can sharpen management’s focus on managing human capital management risks, incentivize the achievement of inclusion and diversity goals, and increase accountability.
RESOLVED: Shareholders request that Hanesbrands prepare a diversity report, at a reasonable cost and omitting confidential information, available to investors including:
1. A chart identifying employees according to gender and race in major EEOC-defined job categories, listing numbers or percentages in each category.
2. A description of policies/programs focused on increasing gender and racial diversity in the workplace.
Supporting Statement: A report adequate for investors to assess strategy and performance can include a review of appropriate time-bound benchmarks for judging current and future progress, and details of policies and practices designed to reduce unconscious bias in hiring and to build mentorship.